5. Tax Evasion

What’s that? You always pay your taxes? I bet you do. Though I’d also bet that you don’t pay everything you owe. Forgetting the abhorrent loopholes that multinational corporations have become experts at exploiting, your average taxpayer also makes a ton of fraudulent claims. As far as the IRS is concerned, the bulk of fraudulent reporting comes from self-employed restaurateurs, shop owners and car dealerships who all tend to underreport income.

Beyond that, self-employed taxpayers also regularly overclaim their expenses. That comedy show you took your buddy to is not a business expense. Neither are all the miles you racked up the summer you followed your favorite band on tour. Statistically, you’re very unlikely to get busted for tax fraud, but you should still beware. In cases of negligence, you can find yourself having to pay an additional 20% in penalties on top of your overdue bill. However, if investigators determine you willfully defrauded the government, you could be looking at 75% in penalties and jail time. Think about that the next time you try to write off a Valentine’s Day dinner with the wife.